A handful of updates on the SBA's PPP Loan Program:
An investment firm we know well called Granite Creek Capital Partners, LLC (together with Theron Technology Solutions) came out with a calculator to assist companies in calculating their PPP Loan eligibility. It is free and you can access it here.
Late last week the SBA came out with "additional guidance" on the affiliate concerns under the loan program though after review the broad consensus (ours included) is that this did not change anything relevant to any startups or venture-backed companies (which is where the affiliate concerns have mostly arisen). Sen. Marco Rubio, one of the co-sponsors of the CARES Act, has indicated by Twitter that further guidance and changes are coming.
The overall process remains very hectic overall. We are seeing and hearing about different banks asking for different things. Since banks are processing these loans rather than the SBA (as is the case with the EIDL) and since the provisions here are so new and this is happening in such a hectic manner, we expect a wide range of requests as banks scramble to process these applications and maintain underwriting standards. If your bank is asking you for something that you can't easily provide you may want to run it by an attorney and we are happy to discuss. Sometimes you can effectively push back and see the bank yield but other times you may need to accommodate the request or seek out a new bank for the loan. (One frequent request is an updated good standing certificate from your state of formation. Our paralegal processes these regularly for clients and can do so for you as quickly as required. Feel free to write our paralegal, Jess, here.)
Everyone is scrambling to get loans in today after Friday was a bit of a false start for the PPP Loan program. While these loans ARE being processed on a first in first out basis, and while no one knows how far this money will go, the applications for this program are open for months so presumably (hopefully?) processing your application after the first few days will not result in a lack of funds here.
NOT LEGAL ADVICE
Please be advised that we have provided the information contained here as a courtesy and while we have sought to be as current and accurate as possible we do not represent the accuracy of anything contained here. Nothing contained here should be considered legal advice.